Spitzer, firms to meet Thursday

LuisaBeltran

WASHINGTON (CBS.MW) -- Top securities firms will meet with state and federal regulators, including New York State Attorney General Eliot Spitzer, this week to discuss conflicts posed by analyst research, people familiar with the discussions told CBS.MarketWatch.com Tuesday.

One plan includes the creation of a new oversight board while another involves setting limits on analyst interaction with investment bankers, sources said.

The meeting is slated to be held on Thursday at the Securities and Exchange Commission headquarters in Washington, sources said.

Along with Spitzer, attorneys for Goldman Sachs
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Merrill Lynch
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UBS Warburg, Morgan Stanley
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J.P. Morgan
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Bear Stearns, Lehman Brothers and Credit Suisse First Boston will be at the meeting, people said. The National Association of Securities Dealers, as well as SEC officials will also be in attendance, the sources said.

The meeting is not expected to provide any immediate solutions to address analysts' conflicts. "This will be one of the many steps to come in the next few weeks and months," one person said.

The meeting comes as Wall Street continues to be dogged by corporate scandals. Spitzer's office earlier this year won a $100 million settlement from Merrill Lynch due to analysts' conflicts.

Citigroup's Salomon Smith Barney has also come under scrutiny for allegedly doling out shares of hot telecommunications IPOs to top executives in exchange for investment banking business.

In September, Spitzer sued former WorldCom CEO Bernie Ebbers and four other telecom executives, seeking the return of millions of dollars in profits from IPOs underwritten by Salomon. While Spitzer did not charge Salomon in the suit, he has said that former analyst Jack Grubman was at the center of the scheme. See story

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